This is Why You're More Vulnerable to Identity Theft Than You Realize

NEW YORK (MainStreet)When it comes to doing banking and business online, all your data is sensitive data. Even something as simple as checking your balance online transmits account numbers, routing numbers, balances and other critical information. It only takes one insecure account or login to compromise your data, no matter how secure the rest of it is. With 12.6 million identity thefts in 2012 alone, this is hardly an academic enterprise. We spoke to data experts about what threats are out there and how you can avoid becoming another statistic.

"People need to realize that QR codes are links that lead you back to something unknown," says Lynn Price, a security strategist with an emphasis on finance at IBM. "You need to be rather suspicious of it, even thought it's a cool technology." What this means is that merely by taking a picture of the code, you can potentially be compromising your smartphone. Depending on what apps you're using, this could be exposing you to a vast intrusion into your personal financial data.

Gregg Smith, CEO of KoolSpan agrees. "QR codes are extremely vulnerable," says Smith. "Those QR codes are everywhere. If you walk down the street in New York, you'll see a ton of them." Simply taking a picture of one can riddle your phone with malware.

Social Media: Full of Traps

The 2010s are the era when social media has really taken hold. No longer the domain of early adopters, everyone and his grandmother is on Facebook these days. Christie Alderman, vice president of new products and services at Chubb Personal Insurance, however, urges a heavy degree of skepticism and a small dose of healthy paranoia when it comes to using social networks.

"People in general are not critical enough of what motivates someone to offer free products online," she says. "Are they collecting your data for marketing purposes or something more nefarious?"

A lot of attention has been paid to having your security compromised by apps. However, just posting onto your Twitter or Facebook feed can compromise your security. Even filling out a profile provides marketers and would-be hackers with a lot of personal information. "All those little pieces of information that you leave behind -- you're giving personal information about yourself, but sometimes also about your friend," says Alderman, adding, "that's all being aggregated."

The solution? "Only provide information that you absolutely must," Alderman said. "Constantly ask yourself if the benefit of this service is worth the potential violation of privacy that could come with it."

Now that you know the threats, what can you do to protect yourself? Price believes that people are entirely too credulous and trusting of newer technologies. "When you're online, you could be on a PC, you could be on a mobile phone, a terminal, a tablet," she says. "You need to protect your device as well as protecting your data. New technologies cause people to get caught up in the hype." She urges that people always be alert and suspicious. "If you get a link in a text, you need to be as suspicious of that as you are an email. You don't know exactly where that leads. Common practices you use with older technologies apply to newer technologies."

Further, Price believes that the best thing you can do is talk to your banking institutions about what protections and safeguards they offer. "Ask what they're doing to protect you, but also how they're keeping the communication lines secure," she says, adding that a good bank also profiles your economic activity and can notice when, for example, you start ordering consumer electronics from Malaysia at 3 a.m.

Smith encourages people to use a more retro technology when conducting important transactions over the phone. He cites the phenomenon whereby organized crime sets up "rogue towers" to intercept personal financial information. "Talking to the bank, making a payment or sharing your credit card over a mobile device -- just don't do it," he says.

He also points out that the threats are even more pronounced overseas. "Identity theft is much more prevalent in countries like China, Romania and Brazil," he says, adding that "they're actively targeting vacationers and business people traveling."

Alderman believes that it's important to have a plan of action for identity theft in place before it happens. This includes having all your credit card information and the customer service numbers in a convenient, easy to access place so that you can make contact immediately. "Most credit card companies will forgive most fraudulent charges if they are reported quickly," Alderman says.

She also urges people to talk to their children early on about technology and its perils. "Children are a big target by identity thieves because they're not using their identity for credit purposes until later in life, so they have many years to use the information before somebody catches them," she says. "It's not until they go to get their first credit card that they realize."